This article is from the Australian Property Journal archive
A SMITHFIELD warehouse has sold under the hammer for $10.4 million as owner occupiers smash auction reserves by millions across western Sydney.
On 7,334 sqm of land, the 101 Woodpark Road property has a 2,290 sqm warehouse that sold to an owner occupier in the construction industry for a figure well above the $8.5 million reserve as they beat out 15 others to secure the site.
They will move into the property once tenant BlueScope Steel Limited – which pays $23,734.28 per month – vacates at the beginning of July 2022.
Landlord Heinrich Pty Ltd had been the long-term owner of the property.
LJ Hooker Commercial Silverwater managed the sale, and the result followed on from the agency’s auction of a Girraween industrial facility which sold earlier in the week under the hammer for $7.87 million, well above the $5.1m reserve set by vendors, owner occupants Nevco Engineering.
That property attracted 14 bidders, who kicked off at $4.5 million. It includes 2,150sqm of industrial improvements within a 3,776 sqm site on a street corner at 95 Mandoon Road.
Marcel Elias of LJ Hooker Commercial Silverwater said the activity at the auction underlined the competition for commercial assets.
“Owner-occupants are driving competition as (loan) repayments are on par with, or significantly less than, some rents tenants are paying across Western Sydney at the moment.
“It was owner-occupiers that purchased both the Smithfield and Girraween facilities, adding to a string of other owner purchases we’ve facilitated in April.”
Earlier in the month, the agency auctioned a 1,000 sqm warehouse on a Wetherill Park site that of almost 3,000 sqm that attracted a dozen bidders. The $5.1 million sale price was $1.5 million above the reserve.
“These premiums are rivalling the competition we’ve seen in the residential real estate market,” Elias said, adding that in the wake of COVID-19, agents were beginning to field enquiries for industrial and office assets from investors who typically focused on the residential market.
“Those enquiries are mainly for stock in the sub-$10 million bracket and that’s because of the shortage of stock in residential and the impact that competition is having on yields (in residential).”
He said industrial yields, for instance, in western Sydney are very favourable, by comparison, ranging from 4% to 5% for lower-grade stock.
